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Today’s Prices
Grain markets finished mostly a little bit lower today as the market consolidates ahead of Fridays USDA crop report.
Grain Market News
U.S. Ending Stocks: 2021-22
The current crop year 2021-2022 began last summer on September 1st and goes through October 31st this year.
The trade is expecting corn stocks to come in at 1.4 billion bushels that would be down 40 million bushels from last month and above the year ago ending stocks at 1235.
The trade is expecting soybeans stocks to come in at 254 million bushels, that would be down 31 million bushels from last month and down just slightly from the year ago level of 257.
Wheat stocks ae expected to come in at 654 million bushels, virtually unchanged from the March report but down almost 200m million bushels from the year ago level.
We may not be at a point where we are running out of grains stocks based on these estimates but keep in mind that large exports and strong demand could continue to pull stocks lower in the May/June report.
South American 2022 Production
The trade is expecting the Brazilian corn crop to be raised by 1.2mmt based on ideas that the suprema corn crop, which accounts for 75% of Brazil’s production, is off to a very good start.
Last year the suprema crop had a disaster and therefore this year’s crop will be sharply higher than it was a year ago provided we get good weather.
The Brazilian corn production is expected to drop 2mmt from last months estimate foo 127 and that would come in 13mmt below the year ago level due to drought that effected southern Brazil and portions of central Brazil.
In Argentina the trade expects corn production to drop 1.1mmt from last month and that would put the crop very close to last years final crop.
Argentina soybeans at 42.6 would be down .9 from last months March report but down 3.6mmt from last year’s Argentina bean crop.
The bottom line is that the trade is expecting Brazil corn to be up a little bit while they are expecting beans in Brazil and corn and bean in Argentina to bean down slightly.
World Ending Stocks: 2021-22 Crop Year
The market expects global corn stocks to be 300.7 down fractionally from last month.
World soybean stocks at 88.4 down 1.6mmt from last month.
Wheat stocks at 281.5 unchanged from a month ago.
When we look at global stocks compared to a year ago its worth noting that global corn stocks are expected to be up form a year ago while soybean and wheat stocks are expected to be down significantly from a year ago.
Grain Market News
Weekly Ethanol Production
This chart does show that we did slip lower to 1.003 million barrels per day, and we need 1.017 per day. So, we are slightly below the level needed to reach the USDA forecast.
But do keep in mind seasonally April and May are relatively slow, and we tend to see increase production in the June/July timeframe.
At this point we believe that ethanol production is on track to reach USDA total, we may be able to exceed it with some good production this summer.
Currently after 7 months of the marketing year, a little over half, we are up 9.8% on ethanol production versus the year ago. USDA is projecting that corn use will be up 6.4%.
Weekly Stocks of Fuel Ethanol
Our stocks fell for the first time in 5 weeks, we dropped to 25.892, that’s still a large level of stocks. Typically, we see stocks declining in the February-May timeframe before stocks find some bottoming action in the May-July timeframe.
Given the fact that US ethanol is cheaper than Brazilian ethanol tells us that our exports of fuel ethanol could be good in April-May, and we would not be surprised to see our stocks of ethanol declining consistently as we move through the next 4-8 weeks.
7-Day Observed Precipitation
Planting is already advanced over 50% complete in Texas and Louisiana and planting is started in portions of Mississippi and southern Arkansas. So, the far southern regions of the US are planting corn.
If weather conditions were favorable, we would be planting corn now in early April from portions of the central Delta up into the southern Ohio valley which would include portions of Kansas, Missouri, and even southern Illinois. But it’s awfully wet in that area right now.
As you can see from our last 7 days, we’ve seen a lot of areas with 2 inches or more of rain just over the last week so it may be a slow start in the southern portion of our US corn region.
7-Day Precipitation Forecast
Unfortunately, there is more rain, nothing excessive in the next 7 days, but we do see a half inch to an inch of rain across the area that would like to be planting now.
The areas that would normally start planting next week up into the central portion of the US corn and bean belt look like they could be cool and wet.
It could be a slow start to the US planting season for corn.
Temperature Probability
The 6–10-day temperature precipitation on the left show’s cool temperatures in the west, warmer to the east but very wet for most of the U.S. corn and bean belt and excessively wet in portions of the Delta, southern Ohio valley, and up into the lower Great lakes.
That could again extend some of the planting delays in portions of eastern and the southern belt.
As we look ahead to the 8–14-day temperatures and precipitation on the right, below normal temperatures for the entire US corn and bean belt with continued above normal precipitation in the east and south.
So, we could see some delays this year, we are not yet talking about preventive plant that won’t take place tell later in May.
But it could certainly be slower start to the planting season if conditions remain cooler and wetter than desired.
March Corn Chart
Corn prices are in an uptrend on the short-term chart, the technical indicators have turned up as well.
Today was somewhat of a disappointing close, closing somewhat lower but overall, an inside day with not taking out yesterday’s low or high.
We currently have overhead resistance at 7.55, we closed at 7.47 so overhead resistance is 8 cents above with chart support coming in at the 10- and 20-day moving average around the upper 7.20’s.
We wouldn’t be surprised to see prices remain in this area as we head towards USDA crop report on Friday.
March Soybean Chart
Soybean prices, which had been in a short-term downtrend last week, are turning the corner.
It was an outside day up, meaning we posted a new high for this move, but we did close lower.
So, a mixed signal on the soybean chart but the technical indicators are pointed upward despite the fact that we had a correction today.
To continue this short-term uptrend, we would like to see soybeans breaking above where all three major moving averages the 10-, 20-, and 40-day moving averages, if we would break above those it would signal the potential from a move towards overhead resistance in the 16.80-16.90 range.
March KC Wheat Chart
Wheat prices have also turned into a short-term uptrend after being lower last week.
That chart turning higher and the technical turning higher tells us there is additional upside potential but today was not a big day on the chart as it was an inside day.
Current chart support comes in at our uptrend line around 10.50 with overhead resistance coming in at the double top at 11.47.
Questions or Comments
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